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Hurricane Harvey Destroyed Your Home? – Pay Property Tax Anyway, Elected Officials Insist; Disaster Provision Ignored

HOUSTON – (By Ralph Bivins, Realty News Report) – Elected officials are responding with deaf ears, blind eyes and cold hearts to the victims of Hurricane Harvey.

Owners of properties demolished by Hurricane Harvey will have to pay as much in taxes as the owners of properties in perfect condition, unless government officials take action soon.

Houstonians who own structures that are uninhabitable will get no tax break at all, even though there is a provision in state law to make the tax burden a little lighter on disaster victims.

Rules are rules, they say. And the 2017 property tax bills are based on the value of the property on Jan. 1, 2017. The deadline to pay 2017’s tax is two weeks away. Annual property taxes, which are huge in the Lone Star State, are due Jan. 31, 2018.

But what’s being ignored is a provision in the Texas Property Tax Code that allows for a mid-year reappraisal of property damaged by natural disasters.

Section 23.02 of the property tax code allows for a disaster reappraisal. Property taxes would then be prorated based on the date the storm made landfall – August 25.

So that would mean homes that were heavily damaged – or completely destroyed – would have a lighter tax burden for the last four months of the year.

The disaster reappraisal can be enacted if – and only if – the elected officials at the taxing entities request it. That means the city council, county commissioners and school boards instruct the Harris County Appraisal District to perform the reappraisal.

Spokesmen for Mayor Sylvester Turner and County Judge Ed Emmett said there are no plans to request the disaster reappraisal.

The expense is not exorbitant. Jack Barnett, spokesman for the appraisal district said the disaster reappraisal could be performed for about $25 per parcel.

Hurricane Harvey inflicted heavy damage on 100,000 homes, thousands of apartment units and about 4 million square feet of office space in the Houston area. Many of those homeowners are renting apartments while they wait for their homes to be repaired. Some of the people are still waiting on the check to arrive from the insurance company. Some flood victims received a 90-day moratorium from their mortgage company and that grace period has expired.

Maybe Mayor Turner should visit a homeowner in west Houston near Addicks Dam. Tell them, Mayor, that they will have to pay tax as if their house is still worth $400,000, even though it’s really only worth lot value in today’s post-hurricane market.

Maybe Judge Emmett should drive to Meyerland. Tell the homeowner, Judge Emmett, they should pretend their home is perfect condition and they have to pay property tax accordingly.

Some of the smaller school districts are taxing entities around Houston have ordered disaster reappraisals. Why are other elected officials so hard-hearted? The real answer: they are fearful about balancing their budgets. But governments have a lot more borrowing capacity than the flood-damaged citizens who are stretched thin. And if homeowners start to crumble, a foreclosure flare-up can certainly lead to a decline in governmental revenue as property values fall.

Frank Nothaft, chief economist of CoreLogic, told me last week that Houston mortgage delinquencies jumped significantly last fall in the wake of the storm. Nothaft, who was chief economist at Freddie Mac for many years, knows a thing or two about delinquent mortgages and foreclosures. A full recovery from the hurricane, he said, could be more than a year away. A property tax reappraisal could offer some relief to Houston homeowners who are under growing financial pressure.

Midyear disaster reappraisals are a rarity in Texas. A property tax expert told me the reappraisal provision was enacted a few years ago when a tornado flattened some houses in north Texas. No one had the gall to deliver a full property tax bill to the homeowners whose homes no longer existed.

The City of Houston, the Houston Independent School District and Harris County should order disaster reappraisals immediately. It’s the right thing to do.

Jan. 16, 2018 Realty News Report Copyright 2018

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